The odds that terrorists will soon strike a major city with weapons of mass destruction are now better than even, a bipartisan congressionally mandated task force concludes in a draft study that warns of growing threats from rogue states, nuclear smuggling networks and the spread of atomic know-how in the developing world.

That's a scary, attention-grabbing first sentence. And if terrorists ever do, God forbid, pull off a nuclear detonation a major city, people will no doubt point to this commission as prescient.

But let's think about this for a minute. How could they possibly come up with these "odds" of such an event? I'd like to see the methodology.

All may not be lost for McCain-supporting Democratic Sen. Joe Lieberman. It seems President-elect Obama won't be kicking him to the party curb after all. Apparently, supporting the opposition -- campaigning with Republican candidate John McCain, speaking at the Republican National Convention, and criticizing Obama's foreign policy cred -- wasn't enough of an offense against Obama to get Lieberman banished from the party altogether.

Not all Democrats are in a forigiving mood, though. Many, like Majority Leader Harry Reid, are still gunning to strip Lieberman of his chairmanship of the Homeland Security and Governmental Affairs Committee. Senate Democrats are set to vote next week on whether or not Lieberman will keep his chairmanship. If Lieberman has spent any time kissing the reigning party's behind since the election in an attempt to keep his spot, he's not exactly apologizing for his recent behavior. Lieberman says he'll walk if he loses his gavel.

I have to get behind Connecticut Sen. Chris Dodd's advice that Obama stay out of this one and avoid a political mess. Why would the president-elect waste such precious time and energy haggling over a Senate seat? And even more to the point, over Lieberman? Let's not gloss over Lieberman's voting recording. While he's fond of saying it's 90 percent in line with Democrats, it tends to go against the next administration's plans when it comes to matters of foreign policy -- Iraq and Iran to name two biggies.

The Connecticut senator has shown himself to be a hardy politician, one who's stayed afloat by swinging between parties. This time Lieberman played his hand, hoping to get another shot at the VP seat, and he bet poorly -- on McCain. If there's a pity party in his honor, I won't be going.

Brendan Hoffman/Getty Images

Former Federal Reserve Chairman Alan Greenspan admitted today that he is not, in fact, infallible.

Asked at a congressional hearing if the financial crisis had led him to discover any flaws in his free-market thinking, Greenspan confessed to being "partially" wrong about regulating derivatives. He added: 

We cannot expect perfection in any area where forecasting is required... We have to do our best but not expect infallibility or omniscience.''

For what it's worth, if you were reading Foreign Policy in January 2005 or even as recently as April 2008, you already knew that Greenspan was not all that.

Photo: TIM SLOAN/AFP/Getty Images

The media circus surrounding the upcoming U.S. presidential elections and the candidates' constant reversion to rehearsed talking points in both the debates and interviews might leave you feeling jaded about the value of media political coverage. But rather than hope for the hoopla to stop, perhaps we should pray that it continues.

 

A recent study by political scientists at MIT and IIES, a research institute in Stockholm, suggests that in the long run media attention really does make politicians -- or U.S. congressmen, anyway -- more accountable:

Congressmen who are less covered by the local press work less for their constituencies: they are less likely to stand witness before congressional hearings, to serve on constituency-oriented committees, and to vote against the party line… Federal spending is lower in areas where there is less press coverage of the local members of congress.

The study set low standards for what counts as press coverage; the researchers simply looked at how often a politician's name is mentioned in local newspapers, which makes the apparent impact of such coverage all the more surprising. The study also finds that press coverage of local politicians is lower in areas where residents get their news from media sources that cater to multiple political districts. Bad news for local readers of the Washington Post and the New York Times?

New York Times columnist David Brooks ate his Wheaties this morning:

In 1933, Franklin Roosevelt inherited an economic crisis. He understood that his first job was to restore confidence, to give people a sense that somebody was in charge, that something was going to be done.

This generation of political leaders is confronting a similar situation, and, so far, they have failed utterly and catastrophically to project any sense of authority, to give the world any reason to believe that this country is being governed.

So did Steven Pearlstein of the Washington Post:

Politicians worry less about preventing a financial meltdown than about ideology, partisan posturing and teaching people a lesson. Financiers have yet to own up publicly to their own greed, arrogance and incompetence. And leaders of foreign governments still think that this is an American problem and that they have no need to mount similar rescue efforts in their own countries.

In the coming weeks and months, all of these people will come to understand how deep the hole really is and how we're all in it together.

In sheer economic terms, I tend to doubt that unless Congress puts together a bailout bill before Monday -- as seems to be the emerging conventional wisdom -- all hell will break loose in markets around the world. As Raghuram G. Rajan told FP earlier this week, the U.S. government's recent moves have actually given the economy some breathing room:

I think three actions by the regulators have bought us a little bit of time. First, guaranteeing the money-market funds. The second was taking some of the pressure off Goldman Sachs and Morgan Stanley by allowing them to become bank holding companies. And third, announcing the fact that the government was serious about fixing the system.

That said, Senate Majority Whip Dick Durban makes a good point here when he says, "If we start talking about another week or two, it will take another week or two." What's more, opportunistic members of Congress will only have more chances to lard up the legislation with irrelevant, possibly harmful additions. So, I can understand why President George W. Bush wants to see action sooner rather than later -- even if it isn't quite as urgent as he says it is.

I could, of course, be catastrophically wrong, and the markets could seize up Monday if Congress doesn't pass a bill.

Here's what to look for. Forget about stocks for the moment. Since the main problem that is keeping Ben Bernanke and Hank Paulson up nights is financial institutions' unwillingness to lend to one another, that's what we should really be paying attention to. The key indicators to watch in this regard are the so-called TED spread and, relatedly, LIBOR. Here's what the TED spread is doing these days:

As you might be able to infer, up is bad. If it spikes any further on Monday, we are all in big trouble.

This statement, from Kentucky Republican Sen. Jim Bunning, is priceless:

Instead of celebrating the Fourth of July next year Americans will be celebrating Bastille Day; the free market for all intents and purposes is dead in America... The action proposed today by the Treasury Department will take away the free market and institute socialism in America. The American taxpayer has been mislead throughout this economic crisis. The government on all fronts has failed the American people miserably."

Despite the usual comments about the need to keep comments short, the senators are still bloviating. Meanwhile, the first pictures of Hank Paulson and Ben Bernanke are now dribbling in. Do these look like men who are happy to be sitting in front of the Senate Banking Committee this morning?

Just released: Federal Reserve Chairman Ben Bernanke's testimony before the Senate Banking Committee:

Despite the efforts of the Federal Reserve, the Treasury, and other agencies, global financial markets remain under extraordinary stress. Action by the Congress is urgently required to stabilize the situation and avert what otherwise could be very serious consequences for our financial markets and for our economy. In this regard, the Federal Reserve supports the Treasury's proposal to buy illiquid assets from financial institutions. Purchasing impaired assets will create liquidity and promote price discovery in the markets for these assets, while reducing investor uncertainty about the current value and prospects of financial institutions. More generally, removing these assets from institutions' balance sheets will help to restore confidence in our financial markets and enable banks and other institutions to raise capital and to expand credit to support economic growth.

Pretty mild stuff, given the stakes. I wonder what he told the congressmen in private last week that had them so terrified?

UPDATE: You can watch the hearing here at 9:30 a.m. ET.

... here's Paulson's testimony.

I see now that Democratic Sen. Chris Dodd has come forward with his own proposal for fixing the U.S. financial system. Dodd, who chairs the Senate Banking Committee, is calling for more oversight of the Treasury Department, limits on executive pay (a red herring), and for the government to be able to get equity stakes in companies that take the bailout (potentially a good idea, but also a can of worms).

You'd have to think that even President George W. Bush and Treasury Secretary Hank Paulson, who sent Congress a bare-bones bill with zero oversight provisions, had to see this coming. In fact, I think they want Democrats to take this legislation and run with it. Why? Because once the Democrats put their stamp on the bill, they'll no longer be able to hang any failure around Bush's neck. It'll be their failure, too.

UPDATE: Republican blogger Patrick Ruffini evidently agrees:

Republican incumbents in close races have the easiest vote of their lives coming up this week: No on the Bush-Pelosi Wall Street bailout.

God Himself couldn't have given rank-and-file Republicans a better opportunity to create political space between themselves and the Administration. That's why I want to see 40 Republican No votes in the Senate, and 150+ in the House. If a bailout is to pass, let it be with Democratic votes. Let this be the political establishment (Bush Republicans in the White House + Democrats in Congress) saddling the taxpayers with hundreds of billions in debt (more than the Iraq War, conjured up in a single weekend, and enabled by Pelosi, btw), while principled Republicans say "No" and go to the country with a stinging indictment of the majority in Congress.

As I noted yesterday, the McCain campaign has been dinging Barack Obama for proposing a slowdown in funds for Future Combat Systems, the Army's $200 billion modernization program.

Well, the indefatigable Noah Shachtman has kept digging, and he's found a doozy. John McCain's top economic advisor, Douglas Holtz-Eakin, submitted a budget plan to the Washington Post's editorial board in July. In it, the McCain campaign says it will eliminate -- not slow -- FCS entirely:

Balance the budget requires slowing outlay growth to 2.4 percent. The roughly $470 billion dollars (by 2013) in slower spending growth come from reduced deployments abroad ($150 billion; consistent with success in Iraq/Afghanistan that permits deployments to be cut by half -- hopefully more), slower discretionary spending in non-defense and Pentagon procurements ($160 billion; there are lots of procurements -- airborne laser, Globemaster, Future Combat System -- that should be ended and the entire Pentagon budget should be scrubbed).

Whoops. Shactman comments:

McCain aides are privately furious about the contradiction, I'm hearing. But there's been no official comment, so far, about the mix-up.

I think Joe Biden is a smart choice for Barack Obama. With nearly 36 years in Washington and much of it atop the Senate Foreign Relations Committee, the Delaware senator's got decades of knowledge about how the U.S. national-security apparatus works and a clear-eyed, unromantic view of America's role in the world.

This experience has made Biden nothing if not extremely confident in his views, which makes him well suited to play the role of Democratic attack dog on foreign policy.

One of his favorite tactics is ridicule: Everyone remembers him saying that a Rudy Giuliani sentence has only three words: "a noun, a verb, and 9/11" during the primary season. But Biden's a pretty serious guy, too. He believes Democrats, who usually poll below Republicans on national security, shouldn't "play defense on foreign affairs," and he leads by example in his frequent op-eds and appearances on the Sunday talk shows.

Watch him take on President Bush here on Meet the Press:

The big rap on Biden, of course, is that he's gaffe-prone and likes to talk, and that's certainly true. Dana Milbank had some fun with the prolix Delaware senator after his questioning of Bush Supreme Court nominee Samuel A. Alito Jr.:

Sen. Joseph R. Biden Jr. (D-Del.), in his first 12 minutes of questioning the nominee, managed to get off only one question. Instead, during his 30-minute round of questioning, Biden spoke about his own Irish American roots, his "Grandfather Finnegan," his son's application to Princeton (he attended the University of Pennsylvania instead, Biden said), a speech the senator gave on the Princeton campus, the fact that Biden is "not a Princeton fan," and his views on the eyeglasses of Sen. Dianne Feinstein (D-Calif.).

Biden's got a good sense of humor about it, though: Watch him eat humble pie on the Daily Show just after he called Barack Obama "the first mainstream African-American... who is articulate and bright and clean and a nice-looking guy." Asked during one of the Democratic debates if he thought he could control himself as president, he simply said, "Yes."

But as much as he likes to talk, Biden's actually a pretty nuanced foreign-policy thinker. He doesn't have strong ideological views, so he's hard to pigeonhole. Looking over his statements and policies over the years, I'd say he hews to a pragmatic form of liberal internationalism backed by American power. I think he takes his responsibilities very seriously.

He uses the term "national interests" frequently, but he's not quite a Scowcroftian realist -- as his push for action in the Balkans and Sudan demonstrates. Nor is he quite a "liberal hawk," either. He has little patience for sweeping rhetoric about how the United States is bringing freedom and democracy to Iraq, and he doesn't (unlike certain other Democratic senators who were passed over for veep) default to the hawkish position on national security just for the sake of sounding "tough". He believes that some situations call for toughness (Sudan) while others call for engagement (Iran). He understands both the need for and the limits of multilateral institutions, and he doesn't see multilateralism as an end in itself, unlike some in his party.

That said, Biden doesn't bat 100 percent. He went ahead and supported the Iraq war despite warning that President Bush was underestimating the risks (he now says he didn't realize Bush would be so incompetent and that he thought Saddam could be deposed by other means). He called the surge "a tragic mistake" in February 2007 while John McCain has backing it wholeheartedly.

But he has gotten lots of other issues right, in my view: He has been calling for years for more resources in Afghanistan, for a more coherent U.S. relationship with Russia, for engagement with Iran, for a broader U.S. strategy toward Pakistan, and so on.

How much influence will Biden have on Obama's foreign-policy views? We'll have to see. But I imagine it will be considerable. Biden doesn't seem like the kind of guy who will simply stick to the talking points he's handed. Should be fun to watch.

President George W. Bush once called for the doubling of the Peace Corps. Barack Obama did too. Economic reality, however, may have the last word, as the declining dollar and rising energy and commodity costs have left the organization facing a budget shortfall:

Those factors "have materially reduced our available resources and spending power," Peace Corps Director Ronald A. Tschetter wrote in a July 22 letter to Rep. Betty McCollum (D-Minn.), a member of the House Appropriations subcommittee that funds the program. "Tough budgetary decisions must be made now in order to ensure a financially healthy agency next fiscal year," he added.

Congress may still come to the rescue, but that may not necessarily be a good thing. FP readers will recall Robert L. Strauss's "Think Again: The Peace Corps" from April, where the former Peace Corps country director wrote that the Corps has "never lived up to its purpose or principles."

One of Strauss's solutions is for the Peace Corps to "concentrate its resources in a limited number of countries that are truly interested in the development of their people." Paring down the budget, therefore, may help the organization in the long run if the right calls are made.

To be sure, not everyone agreed with Strauss. With the new budget conditions in mind, it may be time to revisit the debate from earlier this summer.

With the space shuttle set to retire in 2010, and its replacement not ready until 2015, the United States had been planning on hitchhiking to the International Space Station for a few years. That may be a bit of a problem now, as the one country with the ability to transport to and from the station turns out to be -- you guessed it -- Russia.

Beyond the rising rhetorical showdown between the two sides, there's also a legal roadblock that may prevent further space cooperation with Russia. The United States needs to negotiate a new contract with the Russian space program, which may be difficult because Congress must first pass a waiver to a 2000 law banning government contracts with states who supported nuclear programs in North Korea and Iran. That includes -- you guessed it -- Russia.

In an election year with an increasingly bellicose Moscow, that's "almost impossible," says Florida Sen. Bill Nelson, a supporter of the waiver who admits America is stuck between a rock and a hard place:

It is a lose-lose situation," Nelson said.

"If our relationship with Russia is strained, who knows if Russia will give us rides in the future?" Nelson asked. "Or if they give us rides, will they charge such an exorbitant price that it becomes blackmail?"

Still, who knows what relations with Russia will be like in 2010? Even if the Cold War is truly back, that doesn't necessarily spell the end of U.S.-Soviet -- er, Russian -- space cooperation. A lot could change in the next few years.

Republican House Policy Committee Chairman Thaddeus McCotter rips "Beijing George" Bush in a memo being passed around Capitol Hill:

Today, in his final term, the wildly unpopular President George W. Bush boarded Air Force One bound for the Beijing Olympics and a meeting with his chum Hu Jintao, the dapper ruler of a nuclear armed, communist dictatorship. ... Perhaps our Compassionate Conservative-in-Chief will bring our absent Democrat Congress some 'Made in (communist) China' souvenir t-shirts: 'Bush went to Beijing and all I got was this lousy five week, paid vacation.' "

McCotter wants President Bush to call Congress back from its August recess to vote to expand offshore drilling. Na ga ha pen. As the White House explained, there's no way the House Democrats would allow a vote anyway. Speaker Nancy Pelosi is hoping to run out the clock and get an energy bill more to her liking next year. The GOP obviously senses a political winner, never mind the dubious case for more drilling. But Pelosi's got the gavel.

Walter Pincus reports today on a surprisingly large allocation of U.S. federal funds for cyber security:

A highly classified, multiyear, multibillion-dollar project, CNCI -- or "Cyber Initiative" -- is designed to develop a plan to secure government computer systems against foreign and domestic intruders and prepare for future threats. Any initial plan can later be expanded to cover sensitive civilian systems to protect financial, commercial and other vital infrastructure data."

The cyber security issue is a tricky one. For lack of a better option, the job of protecting government computer systems has fallen to the Department of Homeland Security (DHS), although the Air Force is an active player. The Navy and the Army also have their own programs.

I called James Lewis, an expert at the Center for Strategic and International Studies, to get some insight. He told me that the White House was becoming concerned because "DHS hasn't really done anything" on the issue of cyber security. "Some of it's internal squabbling" he says, "but they just can't seem to get their act together. You hear [Defense Secretary Robert] Gates and [Director of National Intelligence Mike] McConnell talking about it, but you never hear anything from [DHS Secrtary Michael] Chertoff."

So far, CNCI has been criticized for being too secretive, though the initiative is a step forward overall. In fact, it's good news that someone is finally starting to take this seriously. Both presidential candidates have expressed a committment to improving cyber security. Senator Obama has said he will appoint a "national cyber advisor" and will make the issue "the top priority that it should be in the 21st century." Senator McCain has pointed to a need to "invest far more in the federal task of cyber security" in order to protect strategic interests at home.

Knowing just who is supposed to be in charge of cyber security would be a good start. As Lewis points out, "It's not something you can do on an ad hoc basis like we've been doing for the past several years," adding, "We need to be better organized and better at assigning responsibilities."

Any day now, Barack Obama will make his second trip to Iraq and his first visit to Afghanistan, hoping to bolster his foreign-policy credentials and disarm his critics. About time, the McCain campaign says. Others speculate on who Obama ought to see, and what he'll likely be told. But I'm not sure how much it matters. Do trips to war zones really affect lawmakers' perspectives on the conflict?

McCain seems to think so, having suggested that his opponent will change positions on Iraq after meeting with General Petraeus and seeing the surge's success firsthand. But when surveying members of the Senate last summer for The Hill on who has and has not visited Iraq, I noticed that large numbers from both sides of the aisle have made trips, yet many remain steadfast in their support for or opposition to the war. Republicans, for example, often return calling for more time for the troops to secure military gains. Democrats, on the other hand, tend to argue for withdrawal in order to pressure the Iraqi government toward a political solution.

Rep. Jim Marshall noted this tendency in today's Washington Post:

If somebody has been a pessimist about this all along, would their pessimism evaporate? Not necessarily. . . . I'm trying to recall an epiphany," Marshall said. "I can't.

Part of the reason is that most trips are strictly limited to two days, and largely occupied by briefings from military leaders and diplomatic officials. It is often difficult for the junkets to give a true sense of how things are going on the ground, and drawing definite conclusions can backfire politically (recall McCain's embarassing assertion that his heavily guarded trip to a Baghdad market last year was a sign of security and stability).

That said, the trips are still an important piece of the political puzzle. They are more than Sen. Jim Webb's "dog and pony shows" characterization (note that two other would-be Obama veeps, Chuck Hagel and Jack Reed, are accompanying the candidate, not Webb). And while trips alone won't change a candidate's perspective, they can add some much needed credibility to his argument. When Obama returns from his trip and calls anew for withdrawing troops to focus on Afghanistan and Pakistan, he'll be able to back it up, having seen things for himself on the ground.

UPDATE: John McCain says Obama will visit Iraq this weekend.

Nelson Mandela turns 90 on July 18. This morning, President Bush gave the former South African president and anti-apartheid leader an early birthday present by signing into law a bill removing Mandela and other members of the African National Congress from a three-decade-old terrorist watch list.

The bill had been sponsored by Sens. John Kerry, Sheldon Whitehouse, and Bob Corker:

It's high time we honored his message of human dignity and valor by removing unjustified travel restrictions placed on him and other members of the ANC," said Kerry. Whitehouse added, "This problem has caused injustice to South African leaders and embarrassment to the United States, and I'm glad it will be repaired."

Prior to the bill's passage, Mandela had been subject to travel restrictions and required special certification to visit the United States. Secretary of State Condoleezza Rice had called on Congress in April to remove the restrictions, deeming them "rather embarrassing."

I see that some in the U.S. Congress are gearing up to crack down on "speculators" accused of driving up prices for key commodities like oil and corn. Connecticut Sen. Joseph Lieberman is seeking to ban institutional investors from investing in commodities markets at all, and his colleague, Michigan Sen. Carl Levin, is urging the Commodity Futures Trading Commission, which regulates commodities trading in the United States, to take action.

As Diana Henriques explains for the Times, there's a risk the proposed cure would be worse than the disease. Not only is it tough to identify who is engaging in "excessive speculation" versus merely "speculation," it's also completely legal to try to make money from trading commodities. What's more, some analysts argue that speculators actually make the markets function more smoothly by keeping them liquid. (Here's an example of one such argument.)

There's also a fierce debate about to what extent speculators are, in fact, to blame for the high prices. Fatih Birol, chief economist at the International Energy Agency, put the matter thusly in a recent interview:

I believe the main reason for the high prices [is] the growing perception in the markets that the growing demand growth may not be met by the supply growth. And this provides fertile ground for the speculators... [T]he main issue here is the fundamentals but the speculators play an amplifying role in that respect.

The Financial Times provides some support for this view today:

Refiners are paying record premiums for the high-quality crude oil they use to produce diesel and petrol, a sign of strong demand in the physical oil market that calls into question claims that soaring oil prices are being driven by speculators.

Refiners are paying up to $5-$6 a barrel on top of current record prices to secure high-grade oil, traders said, double the level of a year ago. The mark-ups are four times higher than the 2000-2008 average. The movement in prices paid for physical barrels of oil has gone largely undetected outside the refinery industry because financial markets pay almost exclusive attention to the price of oil futures traded in London and New York.

Yesterday the U.S. House of Representatives voted 324-84 to permit the U.S. Justice Department to sue OPEC for manipulating oil supplies and prices. Fortunately, the White House opposes the measure, saying that going after OPEC countries "would likely spur retaliatory action against American interests in those countries."

Rep. Steve Kagen, a Wisconsin Democrat who sponsored the legislation, issued a press release that said, "American consumers remain at the mercy of OPEC nations." Hmmm … Americans, living in one of the wealthiest and most innovative countries on Earth, are helpless weaklings who survive at the mercy of others? Perhaps they should pay attention to columnist Thomas Friedman when he said:

It baffles me that President Bush would rather go to Saudi Arabia twice in four months and beg the Saudi king for an oil price break than ask the American people to drive 55 miles an hour, buy more fuel-efficient cars or accept a carbon tax or gasoline tax that might actually help free us from what he called our “addiction to oil.”